Why Today’s Leaders Must Embrace VUCA

April 3, 2015

Embrace the chaos

Actress Candace Bergen once said: “Dreams are, by definition, cursed with short life spans.” As a leader, do you get people to come off their clouds to be realistic with feet squarely planted on the floor? Or do you encourage them to talk openly about their dreams?

IBM’s global CEO study (1541 CEOs; 60 countries; 33 industries) revealed creativity is now the single-most important leadership quality:

“In the past, CEOs consistently said that coping with change was their most-pressing challenge. Today, our conversations identified a new primary challenge: complexity.”

What’s VUCA?

Eight out of ten CEOs surveyed said they expect to see even greater complexity ahead: more Volatility, more Uncertainty; more Complexity; and more Ambiguity (VUCA).

Startlingly, only 49 percent of CEOs said they feel prepared to handle this increased complexity. Asked to prioritize the three most important leadership qualities in our new 21st Century economic environment: CEOs said creativity is #1.

Leaders have always been admired for their operational excellence, strategic vision, and ability to orchestrate big deals. We’re now seeing a major shift with a heightened awareness of systems-level thinking; “The consequences of any decision can ripple with unprecedented speed across business ecosystems the way the recent economic crisis has impacted nearly every market.”

Leaders now plan to make deeper business model changes to realize their strategies. They’re inviting disruptive innovation, encouraging others to drop outdated approaches and they’re being much more open-minded and inventive in expanding their management and communication styles. One telecommunications CEO said: “The services that account for 80 percent of our revenue today will be our second-largest source of revenue in five years.”

Ambiguity can be an advantage

“What worked before doesn’t work today,” said David Magellan Horth from the Center for Creative Leadership in a Forbes interview. “Innovative thinking doesn’t rely on past experience or known facts. It imagines a desired future state and figures out how to get there. It is intuitive and open to possibility.” Horth says that ambiguity and complexity can be an advantage, not a problem, because it positions us to ask ‘what if?’

Our present VUCA world requires leaders to integrate creative thinking into their normal organizational models. Creativity has been elevated to a leadership attribute because conventional management approaches can’t offer the fresh thinking now required to disrupt the status quo.

The survey said: “CEOs told us their new mandate is immediacy. It is no longer sufficient to think, manage, or delegate based on traditional time horizons or strategic planning cycles. Both new threats and emerging opportunities require an ability to see around corners and act despite some uncertainty, and then start over again.”

What’s your‘what-if’ approach?

While we know a lot about how to engender human creativity — equip people with innovation tools, allow them to set aside time for thinking, de-stigmatize failure, create opportunities for serendipitous learning — some of this knowledge has infiltrated management systems.

Some CEOs are crafting their entire organizations to be catalysts for creativity. A media CEO in the US said, “We need to find, recognize and reward creativity.” On the surface, this is a no-brainer. But the key is doing so in meaningful ways. CEOs can seed creative thinking across their organizations instead of keeping the “creative types” in siloed departments.

Today, every organization must be able to proactively benefit from the diversity of ideas from all employees at all levels. The perfunctory open-door policy never works. Standout CEOs champion a new mindset of questioning – challenging everyone to challenge assumptions and re-conceive what it takes to thrive.

Want to jumpstart innovative thinking?

Gather a small group of employees and ask: what do we do so well all our customers should know? Or ask, “what little things do we do that really annoy customers? Then, listen, appreciate, and initiate change.

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